MB - While I agree TA cannot be viewed as a religion, and to depend on it exclusively is destined to failure, I am a student of TA for one huge reason----
It is the only tool I can find to quantitatively measure one of the largest forces in the market - emotion and psychology.
If TA is used in this vain, you can be assisted with points of entry and exit. Fundamentals are the king, but TA can provide an edge. More often, I use it to detach myself from my own emotion of owning a particular stock I love. TA has taught me when to sell.
I also follow TA precisely because it has a following. When on August 23rd, the S&P500 and Nasdaq 100 broke below their 200 day moving averages, the next few days I bought puts on the market. Why? Because it broke lower, and people knew it. A week ago, the rally carried the averages back to the 200dma. I shorted again on late Monday/early Tuesday precisely because of the belief in the indicators said that it would not go higher. I covered on Thursday when there was evidence of the belief that there was a successful retest of the 8/31 low. Of course, I don't believe it for fundamental reasons, but I can't knock profits.
TA is not a religion, is unclear in most cases, but can be useful sometimes.
Since this is your thread, I will not bring up TA again, unless asked.
Z |
